Getting a Head Start on College Savings
The U.S. Department of Agriculture estimates parents spend about $285,000 to raise a child to the age 17.1 That’s more than one and one-half times the median value of a home in the United States.2 And if you’ve already traded that super-charged convertible dream for a minivan, you can expect your little one’s college education…
Owning a Home Has Tax Advantages But There Are Limits
It’s true that owning a home instead of renting can result in extra deductions at tax time. The cost of ownership is reduced by any tax savings that you are eligible for — but they may not be as much as you expect. Here’s the story if you’re a first-time homeowner or thinking about buying…
Can Group and Private Disability Policies Work Together?
According to The Council for Disability Awareness, a 35-year-old male has a 21% chance of becoming disabled for three months or longer, with the average disability lasting almost seven years.1 Loss of income for such a duration has the potential to cause significant financial hardship. And while Social Security Disability Insurance may help, it’s critical…
Manage Debts to Protect Bottom Line
Paying your company debts is just as important as collecting your own accounts receivable and they need just as much management. The good thing is, you actually have a surprising amount of control over how and when your company’s debts are paid and that provides several advantages. Payment Controls First, adopt good internal controls for…
IRS Explains Rules for Tax-Free Perks
Which fringe benefits are taxable and which are not? Sometimes even IRS agents have difficulty telling them apart. To help its field force, the IRS has a training manual on the tax treatment of fringe benefits. The 119-page manual is designed to help IRS personnel determine the taxability, withholding, and reporting requirements for employee fringe benefits. Of…
Today’s Electronic Trail Makes it Tougher to Hide Assets … and Secrets
With today’s technology, what we do today can echo into the future — and leave enough evidence to be used during court proceedings. The technology used by couples heading towards divorce may lead to remarkable discoveries that can dramatically tip the balance in favor of one spouse or the other. With so much evidence available…
Business Sale: Who Owns Professional Goodwill?
When a professional corporation sells its assets or liquidates, one important tax issue is whether the corporation or the shareholder-employees own any appreciated professional goodwill (with a fair market value in excess of tax basis). For tax purposes, goodwill is an intangible asset. It represents the value of a trade or business based on expected…
IRS Encourages Taxpayers to Check Withholding
Are you having enough money withheld from your regular paychecks? The Tax Cuts and Jobs Act (TCJA) has made several significant changes to the tax rules for individuals for 2018 through 2025. As a result, many taxpayers who previously itemized deductions are expected to claim the standard deduction, starting in 2018. 3 Families Who Might Need…
Sales Tax: Supreme Court Ruling Affects Retailers and Consumers
A new U.S. Supreme Court ruling paves the way for states to require Internet sellers to collect sales tax from consumers — even if they don’t have a physical presence in the state. (South Dakota v. Wayfair, No. 17-494, June 21, 2018) In doing so, the Court has reversed the long-standing, but controversial, precedent in…
Plan Ahead to Make Payments to Retired Partners
Payments made to liquidate a retired partner’s ownership interest in the partnership (other than payments for his or her share of certain partnership assets) are usually subject to the federal self-employment tax (also known as SE tax). That can amount to a large tax bite. An IRS private letter ruling only applies to the specific…